Holding

The limitation period for a claim of arrears of salary begins on the date of reinstatement (or the decree setting aside the dismissal), not on the date of dismissal, and the employee is entitled to the full arrears.

Summary

The widowed appellant and her daughter claimed arrears of salary for their deceased husband, a tubewell technician who was illegally dismissed in 1954 and later reinstated by the Superintending Engineer in 1955. The trial court and first appellate court held that the employee was entitled to full salary for the period he was prevented from duty, and the suit was not barred by limitation. The High Court, however, limited the claim to three years from the suit filing date, applying Article 102 of the Limitation Act, 1908. The Supreme Court held that the limitation period for a claim of arrears of salary accrues only when the employee’s dismissal is set aside or he is reinstated, i.e., the date of reinstatement or the decree, not the date of dismissal. Consequently, the High Court’s modification was erroneous and the appeal was allowed, restoring the trial court decree for the full amount claimed. The Court also affirmed that Article 102 (now Art. 7 of the Limitation Act, 1963) covers salary arrears and that a government servant cannot claim salary until reinstatement.

Issues considered

The appropriate starting point of limitation for a claim of arrears of salary under Article 102/Article 7 of the Limitation Act.
Whether a government employee can claim salary arrears before being reinstated or before the dismissal order is set aside.
Whether Article 102 of the Limitation Act applies to salary arrears.
Whether the High Court erred in limiting the claim to three years from the suit filing date.

Legislation cited

Constitution of Indias. Article 311
Fundamental Rules (U.P.)s. Rule 52, s. Rule 54
Limitation Act, 1908s. Article 102
Limitation Act, 1963s. Article 7

Subjects

arrears of salarylimitation periodArticle 102Article 7reinstatementgovernment employeeFundamental Rule 52Fundamental Rule 54civil suitpublic servant

Judgment

676

A MAIMOONA KHATUN AND ANR.
v.
STATE OF U.P. AND ANR.
April 16, 1980
B [S. MURTAZA FAZAL ALI, P. s. KAILASAM AND A. D. KosHAL, JI.]

Arrears of pay and allowances consequent to reinstatement in service-Period
of Limitation-The date from which the period should be computed whether date of
reinstatement or when the salary become due-Limitation Act 1908 (Act IX o/1908}- t
Article 102 (now Article 7 of the Act, 1963}-Scope of.

c APPe11ants are the widow and daughter of one Zamirul Hassan who was
employed as a tttbewell technician in the Irrigation Department of U. P ~ Govern..
men!. In the year 1954, Zamirul Hassan was posted at Lucknow and was
drawing a salary of Rs. !10/- per month plus Rs. 30/- as Dearness Allowance.
He was granted medical leave from 15th Feb. 1954 to 24th April 1954 after
which lie applied for extension of his leave which \Vas however, refused. As
directed by the authorities, he reported for duty on 20th April, 1954.
D Instead of giving any charge of office, on that day, he was served with notice
dated 27th March 1954 terminating bis services with immediate effect on the
ground that he had reached the age of superannuation. Sri Hassan challen·
ged the said order by a representation to the Chief Engineer Irrigation
department. The Superintending Engineer accepted the plea of the employee
by his order dated 31st December, 1955 and ordered his reinstatement direct·
ing that the intervening period may be treated as leave admissible to him.
E Hassan was then po<ted to Mathura on 15·2-1956. On January 7, !957,
however, Hassan suddenly fell ill at Budaun and died on January 12, 1957.
Even in spite of his reinstatement, the employee did not receive his salary
from 15th February 1954 to 14th February 1956 amounting to Rs. 3360/·
as also from 1·1·57 to 12-1-57 which amounted to Rs. 53/·. Despite the claim
the arrears of salary were not paid and hence the appellants plaintiffs after
giving notice under section 80 C.P.C., to the Government brought a suit
F for the recovery of Rs. 3035-5-0. The plea of bar of limitation taken by
the respondent Government was disallowed and the suit was decreed. The
trial eourt decreed the plaintiff's suit after coming to a clear finding that the
employee, Zamirul Ha:1,an, should have been treated to be on duty during the
entire period because he was illegaUy pervented from doing his duty. As
a logical conclusion of this finding, the trial court also held that the employee
was entitled to bis pay at the rate claimed by him for the period mentioned
G in the plaint. It was further held by the trial court that on the representation
of the employee, his services were ful1y restored and he ,..as tbereforo entitled
to his full salary. The First Appellate Court confirmed it. The High Court
in second appeal accepted the plea of bar of limitation under Art. 102 of
Limitation Act, 1908; but affirmed the finding of fact that Hassan ·was
illegally prevented from duty.
Allowing the appeal by special leave, the Court
H
HELD : 1. In cases, where an employee is dismissed or removed from service
aa::l is reiostate::l either by the appointing authority or by virtue of tl\e order of
M. M. KHATUN V· U.P. STATE 677

dismissS:l or removal being set aside by a civil court, the starting Potnt of limitation A
would be not the date of the order of dismissal or removal but the date when the right
actually accrues, that is to say, the date of the reinstatement, by the appointing
+ authority where no suit is filed or the date of the decree where a suit is filed and
decrood.

2. The right to sue under Article 102 of the Limitation Act, 1908 (now Art.
7 of 1963 AC!) would accrue only after the order of dismissal of the employee is set B
• aside or he is reinstated by the appointing authority concerned. Until this stage is
reached the right to recover arrears of salary does not accrue at all and there is no
question of suing for the arrears of salary when no order of reinstatement had been
passed or the order of dismissal has not been held by a court of law to be void.
[683 B-D]
The tern1inusquo for the suit under Article 102 is the accrual of the salary which
by reason of F. R. 52 cases the moment an order of dismissal or removal is made,
c
Thus until a decree holding the order of dismissal or removal to be void is passed
by the Court, it is not open to the employee to take any steps for recovering his salary.
In other words~ the right to recover arrears of salary would accrue only after an order
of dismissal has been set aside either in a departmental appeal or by a decree in a
civil court. [683 G-H, 684 A]
State of Madras v, A. v. Anantharaman, A.I.R.1963. Madras 425 ; State of D
Bombay v. Dr, Sarjoo Prasad, GumrJstha, I. L. R. 1968 Born. 1024 ; Union of India
v. Giaa Singh, A.LR. 1970, Delhi 185; approved.
Sri Madhav Laxman Vaikunthe v. State of Mysore, [1962] l S.C.R. 886; P1.n;ab
Province v. Pandit Tara Chand, [1947J F.C.ll. 89, distingui5hed.
3. The principle contained in F.R. 54 would, however, apply in any case
and the Position would be that until a Government servant is reinstated, he cannot E
claim any arrears of salary or pay. Moreover in the instant case, Rule 54
applies in terms because the employee was serving in the State of U.P. and
was governed by Rule 54 and was reinstated by the Superintending Engineer,
after his rePresentation was accepted. It is, therefore, manifest that the employee :
could not have claimed any arrears of his salary until he was reinstated. The right
to !IUP. for arrP.ar<i of .;alary accrued only aftei the employee was reinstated. Once
the civil court held that the direction given by the Superintending Engineer to F
treat the period of suspension as on leave being non est. the position would· be
that the employee continued to remain in service and the effect of the adjudi~
catio~ was to declare that he was ~rongfully Prevented from attending his
duties as Public servant. In other words the right to emoluments accrued on
·the_date when the suit was decreed and the starting point of limitation will be
that date because at no time Prior there was any accrual of the right and
hence the starting Point of limitation would not be the date of reinstatement G
but the date when the Court held that the direction given by the Superintending
Engineer was bad because until such a declaration was made, it was not
open to the employee to have claimed the arrears of his i;alary. [684E-F,685A·C]

4. The view that the right to sue for the arrears of salary accrues from the
date when the salary would have been payable but for the order of dismissal
and not from the date when the order of dismissal is set aside by the civil B
court. will cause gross and substap,tial injustice to the employee concerned
who having been found by a court of law to have been wrongly dismissed
678 SUPREME 'coURl' R!lPOR'fS [1980] 3 S.C.R,

A and who in the eye of law would have been deemed to be in service; Wll'uld
still be deprived for no fault of his, of the arrears of his salary beyort<f three
years of the suit which, in spite of his best efforls he could not have ct.riitted.
until the order of dismissal was declared to be void. Such a course """11d
+
in fact place the Government employ~ in a strange predicaJneRt attd· give
an undeserving benefit to the emPJoyers who by wrongfu!Iy dismissing the
employees would be left only with the responsibility of paying them for a
8 period of three years Prior to the suit and swallow the entire arrears beyOnd
this period with.,ut any legal or moral justification. [687 G-H, 688 A-BJ
State of Madhya Pl'<"desh v. State of Maharashtra, [1977] 2 S.C.C. 288, followed.

CIVIL APPELLATE JURISDICTION : Civil Appeal No 1523 (N)
of 1970.
c Appeal by special leave from the Judgement and Order dated
11-2-1969 of the Allahabad High Court in SA No. 1631of1963.
S. S. Hussain for the Appellant.
G. N. Dixit and 0. P.'Rana for the Respondent.
D The Judgment of the Court was delivered by :
FAZAL Au, J. This appeal by special leave is directed against a
judgment and decree dated February 11, 1969 passed by the Allahabad
High Court modifying the decree passed by the lower Appellate Court
and decreeing the plaintiff's claim for arrears of salary, etc., for a period
of three years from the date of the suit adding two months to this period.
E The facts of the case lie within a narrow compass and may be sum-
marised thus.

Zamirul Hassan (hereinafter referred to as the 'employee') Was ·
employed as a tubewell technician in the Irrigation Department of tJ.P.
F Government (hereinafter referred to as the 'Government'). In the year
1954, Zamirul Hassan was posted at Lucknow and was drawing a
salary of Rs. 110/- per month plus Rs. 30/- as Dearnes's Allowattce.
He was granted medical leave from 15th February 1954 to 24th April
-,.
4

1954 after which he applied for extension of his leave which was, Ii.ow-
ever, refused. Accordingly, the employee reported for duty on 20th
G April 1954 but he was not given charge of office on that date. Instead 1
the employee was served with notice dated 27th March 1954 terminating
his services with immediate effect on the ground that he had reached the
age of superannuation. The employee challenged the validity of the
notice through a representation given to the Chief Engineer, Irrigation
Department, contending that as he was below 55 years of age, he could
H not be superannuated. Ultimately, the Superintending Engineer
upheld the contention of the employee by his order dated 31st Decem
ber 1955 and ordered his reinstatement directing that the intcrve11fng
M. M. KHATUN v. V.P. STNI'E (Fazaf Ali, J.) 679

A
period may be treated as leave admissible to him. The employee
was then posted at Mathura on the 15th of February 1956. On
January, 7, 1957, however, the employee suddenly fell ill at Budaun
and died on January 12, 1957. Even in spite of his reinstatement the
employee did not receive his salary from 15th February 1954 to 14th
February 1956 amounting to Rs. 3360 as also from 1-1-1957 to B
• 12-1-1957 which amounted to Rs~ 53. Thus, the total amount which
was claimed to be due to the employee up to the time of his death came
to Rs. 3413 which remained unpaid. On the death of the employee,

.. his widow, the present appellant, alongwith her daughters, obtained a
succession certificate and made a claim to the respondent-Govern_
ment. Despite the claim the arrears of the salary of the employee were
not paid and hence the present plaintiffs after giving notice, under s.80
of tlie Code of Civil Procedure, to the Government brought the present
suit for recovery of Rs. 3035-5-0. The Civil Judge held that the suit
c

was not barred by time and decreed the suit. Thereafter, the Govern-
ment went up in appeal to Appellate court which confirmed the judg-
ment and decree of the trial court. The Appellate court, however, D
directed the plaintiff to produce a succession certificate from the District
Judge before receiving the amount. Having lost in the courts below,
the Government filed a second appeal in the High Court and contended
that the Order dated December 31, 1955 was a valid one and the
direction that the intervening period may be treated as leave was in
y accordance with law and hence the plaintiff could not claim the amount E
during this period. The High Court overruled the plea taken by the
Government on this point. It was then contended before the High
Court that the suit was barred by limitation under Article 102 of the
Indian Limitation Act (Act IX of 1908), as it then stood. The central
dispute between the parties in the High Court was as to what should
be the starting point of limitation in this particular case. According
..
'-r
•
to the appellant, the starting point of limitation would be the date when
the employee was reinstated and restored to service and therefore he
wa&entitled to the entire salary which became due. The etand taken by
the Government was that the period of limitation was to be computed
not from the date of his reinstatement but from the date when the
' salary became due and therefore the claim for salary which was due for
G
any• period beyond three years of the filing of the suit was barred by
limitation. The High Court partially accepted this argument and held
that the suit was undoubtedly barred for any claim preferred by the
plaintiff beyond three years from the date.of the filing of the suit except
for a further period of two months from the <late of the institution of
the suit. The High Court accordingly allowed the appeal and modified
the decree of the courts below. We might mention here that the trial
•
680 SUPREME COURT REPORTS [1980] 3 s.c.R.

A court decreed the plaintiff's suit after coming to a clear finding that
the employee, Zamirul Hassan, should have been treated to be
on duty during the entire period because he was illegally prevented
from doing his duty. As a logical conclusion of this finding, the trial
court also held that the employee was entitled to his pay at the rate
claimed by him for the period mentioned in the plaint. It was further
B held by the trial court that on the representation of the employee, his •
services were fully restored and he was therefore entitled to his full
salary. The Appellate court and the High Court affirmed this finding
of fact given by the trial court. Thus, the admitted position before us
appears to be that the employee having been reinstated would be deemed
to have continued in service right from the date when he was super-
c annuated to the date when he died as the Department itself reinstated
and restored his service. There was thus no justification for the Super-
intending Engineer to have given a direction that the period of his
suspension would be treated as leave. The trial court had held that
the suit was not barred by limitation for any part of the claim of the
plaintiff. The High Court, however, differed only on this limited
D
question of law.

We have heard learned counsel for the parties and although we find
that the question is not free from difficulty, the decisions of this Ccurt
show that the view taken by the High Court is legally erroneous. The
High Court mainly relied on a decision of this Court in Shri M adhav
E
Laxman Vaikunthe v. The State of Mysore (1) as also a pervious decision
of the Federal Court in The Punjab Province v. Pandit Tarachand. (2).

Article 102 (now Article 7 of the Limitation Act, 1963) may be
extracted thus :

· 7. •·For wages in the case~ Three y a s ~
F When the wages
of any other person ) e r j accrue due"

Tb,e Federal Court in The Punjab Province's case (supra) had clearly ·
laid down that the term •wages' appearing in Article 102 of the Limita-
tion!Act of 1908 included salary and in this connection observed thus: ,
"Article 102 applies to suits for wages not otherwise provided
for by the Schedule and covers in our judgmeut a suit to recover
arrears of pay ...... In Article 102 it is intended in our judgment
to cover all claims for wages, pay or slary, not otherewise ex-
pressly provided for in any other Article of the Schedule."
B
(1) [1962) 1 S.C.R. 886.
(2) [1947] F.C.R, 89,
.M. M. KHATUN v. U.P. STATE (Fazal Ali, !.) 681

It further held that a servant of the Crown in India had the right to
maintain a snit for recovery of arrears of pay which had become due to
him. This decision was given because there was some controversy
on the question as to whether or not a suit for arrerrs of salary could be
brought in a court oflaw. The controversy appears to have been sei
at rest by the Federal Court in the aforesaid decision. Furthermore,
the Court held that where an order of dismissal is invalid the position B
is that the employee was never dismissed in the eye of law and would be
deemed to have continued in service until retirement. In this connection
'
the Court observed :
"The order of 19th March 1938, purporting to dismiss the res-
pondent having been made by an authority that had been expressly c
debarred by s. 240(2) of the Constitution Act from making it,
was utterly void of all effect. It was in the eye of the law no more
than a piece of waste-paper. The position is that the respondent
was never legally dismissed from service and continued m law to be
a Sub-Inspector of Police till the date on which he was under the
conditions of his service due to retire, He was thus entitled to draw D
his salary for the period of his service after 19th March, 1938."
The question as to what should be the starting point of limitation
under Article 102 was neither raised nor decided. It seems to have
been assumed or admitted by the parties that as Article 102 applied,
the period of limitation would be three years from the date when the
right to sue accrued. The Federal Court, however, did not decide
as to when the right under Article 102 would actually accrue.
This matter came up for consideration again in Shri M adhm Laxman
Vaikunthe's case (supra), a case on which the High Court has heavily
relied, where it was held that the suit of the plaintiff would be governed
by Article 102 of the Limitation Act of 1908 which provided a period F
of three years from the date when the right to salary would accure. In
this case also, the question as to when the right to sue for the salary
actually accrued was neithter raised nor decided and the only contro-
versy which was before the Court rested on the question as to whether
Article 102 or some other Article would apply to the suit. Another
G
• question that was argued before this Court was whether a Government
servant had a right to recover the arrears of pay by an action in a civil
court, it was decided by the Supreme Court that an employee had a
right to bring a suit for recovery of arrears of pay in a civil court as
held by the Federal Court in The Punjab Province's case (supra). In
this c· ·nnection, this Court observed as follows :-
"On the question of limitation, he held that the suit would be H
g verned by Art. 102 of the Indian Limitation Act (IX of 1908)
5-463SCI/80 ,
682 SUPRBME COURT REPORTS [1980] 3 S.C.R.

A as laid down by the Federal Court in the case of the PU!ljab
Province v. Pandit Tarachand (1947 F. C. R. 89). In that view
of the matter, the learned Judge held that adding the pe_riod of
two months of the statutory notice under s. 80 of the Code of pvil
Procedure given to Government, the claim would be in time from

• June 2, 1951 .... The appellant contended that his suit for arrears
of salary would not be governed by the three years rule laid down
in Art. 102 of the Limitation Act and that the decision of the Federal '
• Court in Tarachand's case (1947 F.C.R. 89) was not correct. The
sole ground· on which this contention was based was that "salary"

-
was not included within the term "wages". In our opinion, no
good reasons have been adduced before us for not following the
aforesaid decision of the Federal Court. In the result, the appeal
1
is allowed in part, that is to say, the declaration granted by the Trial
Court that the Order of the Government impugned in this case is
void, is rGstored, in disagreement with the decision of the High
Court. The claim as regards arrears of salary and allowance is
allowed in part only from the 2nd of June 1951, until the date ofthe
D
plaintiff's retirement from Government service".

This Court disagreed with the High Court and restored the declara-
tion granted by the trial court that the impugned order of the Govern-
ment was void. The Court also allowed the claim as regards arrears
of salary only from the 2nd of June 1951 until the date of the plaintiff's
E
retirement from Government service. Another important aspect of
this decision is that the Court in that case came to a clear finding that
as a result of the order of reversion, the appellant had been punished
but the order of the Government punishing him was not whollJt ir-
regular though the requirements of Art. 311 of the Constitution were
not fully complied with.

Thus, a careful perusal of the decision would clearly'reveal that the
actual question at issue in the present appeal was neither raised- nor
involved in the aforesaid decision. This decision was noticed by a
Division Bench of the Madras High Court in the case of State '"f
Madras v. A. V. Anantharaman (I) where the Court distinguished· the
case referred to above on the ground that the question'of the starting
point of limitation was neither raised nor decided by tl)is Court. In
this connection, the Madras High Court observed as follows :
'.'As we said, the terms ofF. R. 52 are clear and no public servant
who had been dismissed albeit only by an invalid order can ask
B the Government to pay him his salary. His right to it will flow
(1) A.I.R. 1963 Madras 425.
M. Ml KHATUN v. U.P. STATE (Fazal Ali, J.) 683

only when the order of dismissal has been set aside ...... AIR 1962 A
SC 8 was not a case in which F. R. 52 prevented the accrual of
salary, there the Government servant had been reverted from an
officiating post to his substantive post resulting in loss of senoirity
in that post. Such reversion was later held to be one by· way of
punishment and the procedure under Article 311 of the Constitution
B
• not having been followed it was held to be invalid. The only point
argued in that case was whether the salary due to the Government
servant would come within Article 102 of the Limitation Act and
that question was answered in the affirmative."

On the other hand, this point was specifically raised before the
Madras High Court which fully went into it and held that the right to c
sue nuder Article 102 of the Limitation Act would accrue only after
the order of dismissal of the employee is set aside or he is reinstated
by the appointing authority concerned. Until this stage is reached the
right to recover arrears of salary does not accrue at all and there is no
question of suing for the arrears of salary when no order of reinstate-
ment, as indicated above, had been passed or the order of dismissal D
has not been held by a court oflaw to be void. In this connection, the
Madras High Court observed as follows (supra) :-
"But where a public servant had been dismissed or removed, his
pay and allowance would cease from the date of such dismissal
or removal. That is what is provided in F. R. 52. The "question
then will arise as to when in such cases, that is, where there has
been a dismissal or removal which has been later on set aside as
a result of subsequent proceedings the right to recover arrears of
salary will accrue or arise. In neither of the two cases cited above
was that question raised or considered ...... The terminus a quo
for a suit under that provision is the accrual of the salary. In other F
words, the cause of action is not any fixed point of time (e.g., on
the !st of the succeeding month) but when it accrues. By reason
of F. R. 52 the right to salary ceases the moment an order for
dismissal or removal is made."
G
The High Court has rightly pointed out that the terminus quo for
the suit under Article 102 is the accrual of the salary which by reason
of F R. 52 ceases the moment an order of dismissal or removal is
made. Thus, until a decree boding the order of dismissal or removal
to be void is passed by the court, it is not open to the employee to take
any steps for recovering his salary. The Madras High Court then H
concluded by holding that the right to recover arrears of salary would
accrue only after an order of dismissal has been set aside either in a
684 SUPREME COURT REPORTS [1980] 3 S.C.R.

A departmental appeal or. by a decree in a civil court. In this connection,
the High Court observed as follows :-
"We are therefore of opinion that in the case of the dismissal of
a public servant which has been subsequently set aside as in the
present case, the right to recover arrears of salary would accrue
only when that order of dismissal has been set aside either in
B departmental appeal or by a Civil Court. Viewed in that light,
the instant claim must be held to be in time."
We find ourselves in complete agreement with all the observations.
made by the Madras High Court in the aforesaid case. The counsel for

c
the respondent submitted that the Madras High Court erred in relying
on Fundamental Rule 52 which would apply only to a case where the
employee had been removed and then reinstated by the appointing or
the departmental authority. In support of his argument, he relied on
the case of Dcvendra Pratap Narain Rai Sharma v. State of Uttar
Pradesh (1) where after extracting Rule 54 of the Fundamental Rules
••
I

framed by the State of Uttar Pradesh under Art. 309 of the Cons-
D titution, this Court held thus :
"This rule has no application to cases like the present in which
the dismissal of a public servant is declared invalid by a civil court
and he.is reinstated."
Assuming that this was so, the principle contained in Rule 54 would
E however; apply in any case and the position would be that until a
Government servant is reinstated, he cannot claim any arrears of salary
or pay. Moreover, in the instant case, Rule 54 applies in terms because
the employee was serving in the State of U. P. and was governed by
Rule 54 and was reinstated by the Superintending Enigneer, after his
representation was accepted. It is, therefore, manifest that the
F employee could not have claimedlany arrears of his salary until he wa&
reinstated. Thus, even according to the decision relied upon by the
respondent, it is clear that the right to sue for arrears of salary accrued
only after the employee was reinstated. This Court further observed.
in the aforesaid case :-
G "The effect of the decree of the civil suit was that the appellant
was never to be deemed to have been lawfully dimissed from service
and the order of reinstatement was superfluous. The effect of
the adjudication of the civil court is to declare that the appellant
had been wrongfully prevented from attending to his duties as a
public servant. It would not in such a contingency be open to the
H authority to deprive the public servant of the remuneration whicn
he would have earned bad he been permitted to work."
(I) [1962] Supp, 1 S.C.R. 315.
M. M. KHATUN v. U.P. STATE (Fazal Ali, J.) 68 5

In view of this observation once the civil court held that the direction A .
given by the Superintending Engineer to treat the period of suspension
as on leave being non est, the position would be that the employee
continued to remain in service and the effect of the adjudication was
to declare that he was wrongfully prevented from attending his duties
as a public servant. In other words, the right to emoluments accrued
on the date when the suit was decreed and the starting point of limi- B
talion will be that date because at no time prior there was any accrual
of the right and hence the starting point of limitation would not be the
date ofreinstatement but the date when the Court held that the direc-
titin given by the Superintending Engineer was bad because until
such a declaration was made, it was not open •O the employee to have
claimed the arrears of his salary. C

So far as the question when the right would accrue and whether the
period of three years was to be counted from the date of the suit or the
date of the reinstatement was a point that was neither raised nor
answered even in this decision. In the case of State of Bonbay v. Dr.
Sarjoo Prasad Gumasta (I) the view taken by the Madras High Court D
was fully endorsed and it was pointed out that under Fundamental
Rules 53 and 52 the Government servant's salary ceased upon his sus-
pension and he becomes entitled only to subsistence allowance. It
was held that so long as the order of suspension or dismissal stands,
the Government servant cannot obviously claim his salary because no
salary as such accrues due. The court observed thus(!) :- E

"That date would be the starting point of limitation for a suit
by the Government servant and the date when the order is quashed
would be the terminus a quo for a suit by the Government servant
of claim for the arrears of salary and allowances for the period
from the date of his suspension and/or dismissal." F

A Division Beneh of the Delhi High Court has also taken a similar
view and while dwelling on the starting point of limitation under Article
102, in the case of Union ofIndia v. Gian Singh's(2) case observed as
follows :-
' G
"Article 102 of the said Limitation Act undoubtedly provides
that a suit for wages has to be filed within three years of the time
when they accrue due. The question, therefore, is whether the
respondent did have a cause of action for claiming his full pay
and allowances for the period 19-11-1953 to 18-7-1956 in the presen
suit which he filed on September 10, 1959 ...... It was only on the
H
(1) I. L. R. 1968 Bombay 1024.
(2) A.T.R. 1970 Delhi 185
686 SUPREME COURT REPORTS [1980] 3 S.C.R.

date of the receipt of the notice of termination of services, that is,
26-1-1958 that the order of suspension stood revoked, and it would
be only on and after 26-1-1958 that the respondent could be entit-
led to claim full pay and allowances for the period of suspension.
Full wages for the period of suspension would, therefore, accru
to him by reason of Fundamental Rule 53 only when the order
B of suspension is revoked or could be deemed to have been revoked.
Prior to that the wages would not accrue and he would have no
cause of action."
So far as this Court is concerned, the matter stands conclu()ed
by a decision of this Court in case of The State of Madhya Pradesh
c v. The State of Maharashtra & Ors.(1) where a Bench of three 1u4ges
considered this specific question and distinguished the earlier decisions
of this Court in Jai Chand Sawhney v. Union of India(2) and Sakal Deep
Sahai Srivastava v. Union of India.(> )While expounding the law regard-
ing as to when the right to sue actually accrues, this Court observed
as follows(l) :-
D
"Three features are to be borne in mind in appreciating the
plaintiff's case from the point of view of limitation. First the plain-
tiff became entitled to salary for the period September 16, 1943
upto the date of reinstatement on December 12, 1953, only when·
pursuant to the decree dated August 30, 1953 there was actual
E reinstatement of the plaintiff on December 12, 1953 ..... .
On these facts two consequences arise in the present appeal.
First, since the plaintiff was under suspension from September
16, 1943 till December 12, 1953 when he was reinstated and again
suspended from January 19, 1954 till February 23, 1956 when he
was dismissed, his suit on October 6, 1956 is within a period of
F three years from the date of his reinstatement on December 12,
1953. Second, during the period of suspension he was not entitled
to salary under Fundamental Rule 53. Further decision to that
effect was taken by the Madhya Pradesh Government on January
28, 1956 under Fundamental Rule 54. Therefore, the plaintiffs
cause of action for salary for the period of suspension did not
G
accrue until he was reinstated on December 12, 1953. The plaintiff's
salary accrued only when he was reinstated as a result of the decree
setting aside the orders of suspension and not of dismissal. ...
The rulings of this Court in Jai Chand Sawhney's case and Sakal
Deep's case do not apply to the present appeal because there was
H (1) [1977] 2 s.c.c. 288.
(2) [1970] 3 S.C.R. 222.
(3) [1974] 2 S.C.R. 548.
M:- M:. KHATUN v. U.P. STATE (Fazal Ali, !.) 687

no 11spect of any suspension order remaining operative Ull.til the A
fact of reinstatement pursuant to the decree ...... Therefore, there
would be no question of salary accruing or accruing due so long
.as prder of suspension and dismissal stands. The High Court was
!)<lrrect in the conclusion that the plaintiff's claim for salary ac-
qrµed due only on the order of dismissal dated February 23, 1956
b~ng set aside."
II is, therefore, ma.nifest from a perusal of the observations made
by thi$ Court in the aforesaid case that the plaintiff's salary accrued
only Wlten the employee Was reinstated as a result of the decree settiRg
aside the order of suspension or dismissal.

In that case, the employee was suspended as far back as 16th Sep-
tember 1943 and after an enquiry, the employee was removed from
service' on 7th November 1945. The employee filed a suit on the 6th
of J;lnlljlry 1949 and claimed his salary from 16th September 1943,
the date when he was suspended, up to the date of his reinstatement
on December 12, 1953 when the decree was passed. Indeed, if the view D
taken by the High Court in the instant case was correct, the suit of
the employee would have been hopelessly barred by limitation and he
could not have got a decree for more than three years from 1949, the
date when he filed the suit. This Court, however, held that ~s the start-
ing point of limitation was not the date of the suit but the date when
the removal of the employee was held to be void and he was reinstat- E
ed, Uie suit was not barred by limitation. We might also mention that
this Cpurt also held that under Fundamental Rule 52 of the U, P.
Rules, the pay and allowances of a Government servant ceased from
the date of dismissal and therefore there was no question of his claim-
ing aey arrears so long as his dismissal or removal stood. The facts
of the present case seem to us to be directly covered by the decision
rendered by this Court in the aforesaid case.
Tl111s, this Court has fully endorsed the view taken by the Madras
and the Bombay High Court, referred to above.
It 1'j:ems to us that if we take the view that the right to sue for the G
arrears of salary accrues from the date when the salary would have
T been payable but for the order of dismissal and not from the date
when the order of dismissal is set aside by the civil court, it will cause
gross and substantial injustice to the employee concerned who having
been found by a court of law to have been wrongly dismissed and
who in the eye oflaw would have been deemed to be in service, would e
still be deprived for no fault of his, of the arrears of his salary beyond
three years of the suit which, in spite of his best efforts he could not
688 SUPREME COURT REPORTS [1980] 3 S.C.R.

A have claimed, until the order of dismissal was declared to be void.
Such a course would in fact place the Government employees in a
strange predicament and give an undeserving benefit to the employers
who by wrongfully dismissing the employees would be left only with
the responsibility of paying them for a period of three years prior to
the suit and swallow the entire arrears beyond this period without
any legal or moral justification. This aspect does not appear to have
been noticed by the courts which have taken the view that the starting
point of limitation would be three years from the date of the suit and
was for the first time noticed by this Court in State of Madhya Pradesh
v. State of Maharashtra & ors. (supra) which seems to us to have
righted a wrong which was long overdue.
For these reasons, therefore, we are clearly of the. opinion that
in cases where an employee is dismissed or removed from servico and
is reinstated either by the appointing authority or by virtue of the
order of dismissal or removal being set aside by a civil court, the start-
ing point of limitation would be not the date of the order of dismissal
D or removal but the date when the right actually accrues, that is to say,
the date of the reinstatement, by the appointing authority where no
suit is filed or the date of the decree where a suit is filed and decreed.
In this view of the matter, the High Court was in error in modifying
.the decree of the trial court and the lower Appellate Court and limiting
E the claim of the appellant to a period of only three years prior to the
suit. In view of the findings given by the courts on facts, which have
not been reversed by the High Court, it is manifest that the appellants
are entitled to the entire decretal amount claimed by them and for
which a decree was granted by the trial court and the lower appellate
court. We, therefore, allow this appeal, set aside the judgment and
F decree of the High Court and restore the judgment and decree of the
trial court. The appellant will be entitled to costs throughout and
interest at the rate of 6 per cent per annum on the decretal amount
from the date of the termination of his service to the date of payment.

;
S.R. Appeal allowed.